BCSC announces first registration in Canada of a cryptocurrency investment fund manager

The British Columbia Securities Commission announced this week that it has granted registration to First Block Capital Inc., a bitcoin investment fund manager. This is the first time an investment fund manager solely dedicated to cryptocurrency has been approved in Canada, says the regulator.

First Block Capital is registered with the BCSC as an investment fund manager and an exempt dealer, which allows it to operate a bitcoin investment fund. It is also now registered in Ontario with the BCSC being its principal regulator.

New and novel form of investing

"Cryptocurrency investments are a new and novel form of investing in Canada. We have seen from the market and from investors that there is a strong appetite for access to these kinds of investments," said Zach Masum, manager, Legal Services, Capital Markets Regulation, and leader of the BCSC's Tech Team. "This first registration allows access to bitcoin investments, while providing the BCSC with unique mechanisms to monitor operations in a rapidly developing area."

The BCSC says cryptocurrency investments raise risks that are different from traditional asset classes, such as cybersecurity risks. “The conditions of registration imposed on First Block Capital were crafted to give flexibility to allow them to operate under the present regulatory framework, and give tools to the BCSC to evaluate the identified risks of this innovative fund type,” says the regulator.

Tech Team available to help

"We strongly encourage other companies in British Columbia, whether they are potential new registrants or existing investment fund managers, to contact the BCSC's Tech Team if they are considering pursuing cryptocurrency investments in their funds," said Masum. "The Tech Team can help ensure compliance with securities regulation, which can help save time and potential costs later on."

The BCSC launched the Tech Team in January 2017 as part of its fintech outreach initiative to help B.C.-based fintech and technology companies understand their securities regulatory requirements.